It was the tweet heard around the biotech world, again. Mylan bumped up the price of the EpiPen 400 percent, presidential nominee Hillary Clinton responded with a tirade against drug price hikes, and—much like when Clinton railed against drug pricing last year—biotech indexes promptly plummeted more than 3 percent.
Last year, Clinton’s target was Martin Shkreli and Turing Pharmaceuticals, which boosted by 5000 percent the price of an anti-parasitical drug often used by HIV patients. No surprise, Shkreli weighed in during the media frenzy with support for Mylan.
Drug pricing rhetoric had dissipated over the past few months, leading to a steady biotech rally over the summer. But with the presidential election now just over two months away, the EpiPen brouhaha has put the drug industry back in political crosshairs once again. That and the rest of this week’s biotech headlines below.
—Mylan (NASDAQ: MYL), which last year completed a so-called “tax inversion” to move to the Netherlands and a lower tax bill but still has U.S. operations in Canonsburg, PA, was taken to task this week for raising the list price of its EpiPen epinephrine injections, a critical emergency treatment for people with life-threatening allergies. Its latest hike has brought the two-pack of injectors to more than $600, according to the Wall Street Journal. Critics say Mylan has been emboldened by the recall of EpiPen’s only competition last fall. In response, Mylan has offered more discounts and rebates, but it has not lowered the list price. Mylan CEO Heather Bresch said Thursday on CNBC that much blame for the cost hike falls upon middlemen, like pharmacy benefit managers.
—Any day now, the FDA could approve or reject a Duchenne muscular dystrophy drug from Cambridge, MA-based Sarepta Therapeutics (NASDAQ: SRPT). The decision has significant ramifications, one of which being it could set a benchmark for the regulation of rare disease treatments. The situation highlights a complex issue in healthcare, and advocates for patients with another rare disease, spinal muscular atrophy—which could see its first approved drug next year—have watching the situation closely.
—Pfizer won the auction for San Francisco cancer drug maker Medivation (NASDAQ: MDVN) with a $14 billion all-cash bid—at $81.50 a share, it was $5 billion higher than the hostile offer Sanofi made for Medivation earlier this year. Whether Medivation will be worth the price remains to be seen. The company shares rights to its lead drug enzalutamide (Xtandi) with Astellas Pharma and its second drug, talazoparib, a type of cancer treatment called a PARP inhibitor, awaits crucial Phase 3 data next year.
—More PARP-a-palooza: Shares of Clovis Oncology (NASDAQ: CLVS) surged more than 27 percent after the Boulder, CO-based company said that the FDA has begun a review of its PARP blocker rucaparib in ovarian cancer. An approval decision should arrive by Feb. 23. Rucaparib represents a second chance for Clovis, which scrapped its lung cancer drug rociletinib in May in the wake of a data revision fiasco.
—Pfizer wasn’t done after scooping up Medivation. Two days later, it paid AstraZeneca $550 million upfront for the rights to a group of antibiotics either already on the market or in late-stage testing. The deal also includes a $175 million deferred payment due in 2019 and $850 million in downstream payouts tied to regulatory and sales targets.
—Amgen (NASDAQ: AMGN) of Thousand Oaks, CA, said that the FDA rejected its drug etelcalcetide (Parasbiv), a treatment for patients with an excess of damaging hormone release because of chronic kidney disease. The company gave no reason for the rejection.
—A five-day workshop in Washington, D.C., on boardroom skills for women executives in biotech announced its 20 participants. The program, “Boardroom Ready,” is funded in part by LifeSci Advisors, the investor relations firm that sparked a furor by hiring female models to mingle at its J.P. Morgan party. The firm has since pledged to help close the gender gap among biotech leadership.
—South San Francisco, CA-based Denali Therapeutics, with ambitions to develop drugs for several neurodegenerative diseases, bagged $130 million in a Series B and unveiled a series of deals. Part of the cash, which adds to the firm’s $217 million Series A, will go toward its first clinical trial, set to begin in Europe after a regulatory green light.
—Cambridge-based startup Amylyx Pharmaceuticals raised a $5 million Series A round from Morningside Venture, the ALS Investment Fund, and former Genzyme CEO Henri Termeer to develop a drug meant to stop the death of nerve cells in patients with amyotrophic lateral sclerosis. A Phase 2 trial of the drug, AMX0035, should start in late 2016 or early 2017.
—Theranos, of Palo Alto, CA, plans to appeal sanctions the Centers for Medicare and Medicaid Services placed on its Newark, CA, lab last month.
—Cambridge-based PixarBio is raising $30 million in a reverse merger with an undisclosed public entity. It will retain the PixarBio name and aims to start trading on the over-the-counter market during the second week of September. PixarBio, which counts MIT’s Bob Langer among its founders, is developing a non-addictive alternative to morphine for post-surgical pain.
—San Carlos, CA-based BioCardia will also go public via a reverse merger, four months after dropping plans for an IPO.
—David Holley profiled the career of George Peoples, a prolific surgeon and war veteran now devoting his time to cancer vaccine research.
—Novan, a Durham, NC, company that aims to develop nitric oxide-based drugs for an array of skin conditions, filed for an IPO. Frank Vinluan has more on Novan, which relied on a variety of high net worth individuals, rather than venture firms, to get to this point.
—Tarrytown, NY-based Regeneron Pharmaceuticals (NASDAQ: REGN) will work with the Biomedical Advanced Research and Development Authority to develop antibody drugs for the prevention and treatment of Middle East Respiratory Syndrome, or MERS. Regeneron already has an agreement with BARDA on an Ebola-fighting antibody that recently began early stage clinical testing.
Alex Lash contributed to this report.Reprints | Share:
UNDERWRITERS AND PARTNERS
[Updated, 1:09 pm ET, see below] Heather and Jessica Tomko will tell you that they’re nothing alike. They’ve got different interests, different tastes in movies, television, and music. If Jessica hates a gift, Heather probably loves it. Heather just scored tickets to see the Broadway show Hamilton and can’t wait. Jessica sighs.
“You can’t get a bigger fad than Hamilton,” Jessica says. “We go to very few concerts together. Heather refuses to go to anything I enjoy going to.”
But the sisters also have things in common, including the rare disease spinal muscular atrophy. They have spent their lives—Jessica is 26, Heather is 27—in wheelchairs. Neither has ever walked. They need help getting out of bed and getting dressed in the morning. Heather had a feeding tube implanted a few years back. They can no longer lift their arms over their head the way they could five or 10 years ago.
“It’s just little things like that where it’s a gradual loss of strength,” Heather says.
There is no approved treatment for SMA. Left untreated, Heather and Jessica, who have a slower-developing form of the disease, might expect to continue to get weaker as time goes on.
Their story has undeniable emotional appeal. But that appeal also underscores an important issue in healthcare these days: The growing power and sophistication of patient advocacy groups for rare diseases, the complex roles they play in the development and regulation of new drugs, and the big business opportunities those drugs provide to pharmaceutical companies.
According to a 2015 report from EvaluatePharma, the market for drugs for rare, or “orphan” diseases, as they’re known, has been growing by 12 percent every year and is expected to reach $178 billion worldwide by 2020. The small populations of patients with those diseases, combined with a lack of alternative treatments, means the drugs typically command very high prices—on average, an estimated $111,820 per patient, per year between 2010 and 2014, according to the report. Twenty-one orphan drugs were approved in 2015, a record for the second straight year.
The first-ever treatment for SMA could soon gain approval, too. In the next few months, Biogen (NASDAQ: BIIB) and Ionis Pharmaceuticals (NASDAQ: IONS) are expected to ask the FDA for approval of nusinersen, which is meant to help improve the motor function in SMA patients.
Nusinersen would become the first in an advancing pipeline of SMA drugs—at least six in clinical trials now, according to the nonprofit group Cure SMA—to make it that far.
Once the application is filed, the FDA typically makes an approval decision in up to 10 months. That review period gives patient advocates a chance to impact a typically bureaucratic process. For Duchenne muscular dystrophy, also a rare disease without treatments, public hearings to discuss drugs under review have featured throngs of patients and patient advocates pleading with regulators to approve experimental drugs despite flawed data. Two drugs have been rejected, nonetheless. A third, eteplirsen, from Cambridge, MA-based Sarepta Therapeutics (NASDAQ: SRPT) was under review with what seemed like a bare minimum of data. FDA officials made unusually pointed comments about the effect of advocates’ appeals, and the agency has since delayed a final decision and asked for more data.
Patient groups played a critical role in the advancements of therapies for AIDS, multiple myeloma, and cystic fibrosis, now approved and used by people every day. Cure SMA backed early research that helped scientists understand the underlying cause of SMA. The ALS Foundation announced recently that money raised from the Ice Bucket Challenge—in which people shared videos of themselves dumping buckets of ice water on their heads to promote ALS awareness—helped scientists uncover a gene implicated in the disease.
Some rare diseases have become profitable targets for drug makers. Alexion Pharmaceuticals (NASDAQ: ALXN) has turned eculizumab (Soliris), a treatment for the blood disorder paroxysmal nocturnal hemoglobinuria, into a $2 billion-a-year cash cow. But many other diseases remain underfunded or completely neglected. Patient groups help raise money for basic research and, if a drug emerges that seems promising, help recruit patients for trials. The stories from within their communities—like that of Heather and Jessica Tomko, who agreed through Cure SMA to speak with the media—can lead to awareness and help their cause. (Other SMA patient groups did not respond to inquiries from Xconomy.)
“These groups have now taken it upon themselves to drive research, to raise money, and to really stimulate scientists working on their diseases,” says Voyager Therapeutics (NASDAQ: VYGR) CEO and former Eli Lilly R&D chief Steve Paul. “It’s just remarkable how effective [patient groups] have been.”
They’re increasingly involved in the regulatory process as well. According to Cure SMA CEO Kenneth Hobby, his organization has been in contact with the FDA for some time about the disease and its impact on families and patients. Hobby says he hopes a … Next Page »Reprints | Share:
How often would you go to the doctor if you had to pay for a big chunk out of pocket—or how about if it was completely free? The amount of health care we consume depends on how good our health insurance is. Now, two economists, David Powell and Dana Goldman, have looked at what factors drive up costs and have some data that should affect decisions from policy makers and business leaders.
First, let me define what I mean by a “good” or “bad” health plan. A plan with low deductible, co-pay, and co-insurance is good, while the opposite is bad. In the health insurance marketplace set up as part of the Affordable Care Act, health plans are ranked as gold, silver, or bronze to help make the quality of the plan clearer.
As you would expect, the annual premium of a good health plan will generally be higher than a bad health plan because it offers more coverage. The insurer has to spend more money to cover the expenses of a patient with a good health plan.
What’s interesting is that the added cost of a good health plan is not explained merely by the money the insurer spends to cover the gap left by the lower deductible, co-pay, and co-insurance. There is an excess increased cost associated with a good health plan. This excess cost is the result of two phenomena known to economists and the insurance industry: adverse selection and moral hazard.
Adverse selection may refer to a good plan attracting high-cost consumers. For example, if a person has multiple medical problems or is not consistent with her medical treatment, she might consciously or subconsciously select a better health plan, anticipating high health expenses. The good health plan thus attracts consumers who are expected to have higher than average costs, thereby driving up the cost of the plan for everyone else.
Moral hazard, on the other hand, does not come from inadvertently selecting for higher cost consumers. Instead, when a person has purchased a good health plan, he or she is more likely to use the services offered as part of the plan. For example, if I buy a good health plan that includes a low co-pay for expensive specialist services, I might be more likely to see specialists for issues that could probably be handled by a less expensive primary care doctor. If I had selected a bad health plan instead, I would have probably stuck with the cheaper primary care doctor.
Adverse selection and moral hazard are a big deal. Powell and Goldman, in a paper in National Bureau of Economic Research this January, found that these factors added over two thousand dollars to the cost of the better health plan at the company they studied.
Powell and Goldman used innovative statistical methods to tease apart these two factors and found that at that company, adverse selection accounted for 47 percent of the extra expense, while moral hazard contributed the remaining 53 percent of the expense. In other words, adverse selection and moral hazard shared a roughly equal blame for the excess cost of a good insurance plan at that company.
As the authors point out, adverse selection and moral hazard sometimes move in opposite directions with policy changes, making costs more difficult to control. The Affordable Care Act, for example, attempted to combat adverse selection by requiring all Americans—even the young and healthy—to obtain health insurance. By bringing healthier people into the market, the ACA hoped to reduce adverse selection. At the same time, though, the ACA gave these healthy people more access to the health system, increasing moral hazard. And, by creating minimum coverage requirements such as free annual check-ups, the ACA encouraged greater healthcare utilization by increasing moral hazard. While expansion of coverage was itself a goal of the ACA, it is important to recognize that because moral hazard is such a powerful force, some costs may have increased unexpectedly.
For insurers, the relevance is obvious. Several large insurers, including most recently Aetna and Oscar, have dropped out of exchanges because they found they were not profitable. By their own account, patients in the exchanges were sicker than they expected, an indication that the ACA’s goal of mitigating adverse selection did not work out as planned. While Powell and Goldman have not studied the exchanges, their paper suggests that moral hazard likely also played a role.
Companies insuring their employees should also heed the findings of this paper. A company may wish to mitigate adverse selection by eliminating a bad insurance option so that its healthier employees help dilute the risk in the good insurance plan. But if moral hazard is a strong factor, the company will find that excess costs go up with this approach. “A firm trying to deal with high premiums would definitely benefit from knowledge about the split between moral hazard and adverse selection,” Powell told me.
If all this seems a bit wonkish, well, it is. But when thousands of dollars are at stake for each individual’s insurance plan, these issues can significantly affect budgets. Health insurance expenses cost U.S. companies $620 billion annually, according to Castlight, and the federal government spends $840 billion on healthcare. Insurers, HR execs, and policymakers could help themselves out by reading Powell and Goldman’s paper.Reprints | Share:
[Updated 8/24/16, 1 a.m. See below.] A new program to prepare high-ranking women in the biotech industry for corporate board seats has unveiled its first class of 20.
In other circumstances the five-day workshop, scheduled this fall at George Washington University in the nation’s capital, might go unnoticed among the sea of executive training programs offered every day.
But the “Boardroom Ready” program, as it’s called, is the result of widespread demand for action to break biotech’s glass ceiling. The discussion came to a boil earlier this year after a small New York investor relations consultancy hired scantily-clad women to attend its cocktail party at the J.P. Morgan conference in January. [The description of LifeSci Advisors was corrected in this paragraph.]
The firm, LifeSci Advisors, is looking to pay penance by helping fund the training program. The Massachusetts Biotechnology Council and Biogen (NASDAQ: BIIB) are also covering costs for the program. But not all costs: Attendees are on the hook for about $4,000, according to organizers. LifeSci Advisors CEO Andrew McDonald deferred questions to a spokeswoman, who did not disclose figures but said the firm made a “significant contribution.” [Updated with spokeswoman’s comment.]
The 20 attendees were selected from 70 applicants, according to Dawn Hocevar, president elect of Women in Bio, the advocacy group running the program. The training will focus on board-level problems such as fiduciary responsibility, corporate strategy, and legal liability, according to the organizers. Participants will also be paired with coaches and will network for board seats after the course is over. The organizers say they want to place the entire inaugural class on boards within a year of completion of the course.
In an industry whose rank and file is split about equally along gender lines, righting the gender balance at the executive level is a top priority. In a 2014 survey of biotech gender diversity, U.K. recruitment firm Liftstream surveyed nearly 1,500 public companies in the U.S. and Europe. More than half of boardrooms were all male (52 percent in the U.S., 60 percent in Europe).
At small-to-midsized U.S. companies, just 9.7 percent of directors and 20.9 percent of leaders were women. At big companies the number of female directors went up to 19.2 percent, but leadership numbers came down to 13.9 percent.
The situation is exacerbated in small private companies because traditional venture firms, whose partners sit on the boards of their portfolio companies, are male-dominated. Only 9.6 percent of partners in traditional VC firms were women, Liftstream found.
McDonald told Xconomy in May that his firm would help place 15 women on boards by the end of 2017. Placement of the Boardroom Ready participants would apparently count toward that goal.
An advisory board of women and men is meant to hold the investment bank accountable. One member said that LifeSci Advisors is “making great strides.” “They have continued to support diversity in the board room and encourage companies to see the benefits of having female representation,” said Robin Smith, founder, president and chair of the Stem For Life Foundation, via email. [Updated with Smith’s comment and corrected to show that the advisory board also includes men.]
The advisory board includes also Kate Bingham, a veteran venture capitalist who co-authored a scathing open letter after news of the cocktail party broke. Bingham could not be immediately reached for comment.
The Boardroom Ready training is based on an internal program at Biogen called “Raising the Bar” that Biogen is handing off to Women in Bio. Of the 20 women in Boardroom Ready, five are vice presidents or higher at Biogen, but none of them were in Biogen’s internal program, according to Hocevar.
Others come from firms such as Dimension Therapeutics (NASDAQ: DMTX), whose CEO is on the LifeSci Advisors oversight board, Blueprint Medicines (NASDAQ: BPMC), Johnson & Johnson (NYSE: JNJ), and Prothena (NASDAQ: PRTA). Prothena chief business officer Tara Nickerson called the program a “tremendous opportunity to engage and learn from the collective experiences of a group of highly accomplished leaders in the life sciences.” [Updated with Nickerson’s comment.]
Photo “Empty Boardroom” courtesy of reynermedia via Creative Commons.Reprints | Share:
How important is having a “big idea” for startups? Ideas can generate a lot of buzz and capture attention from investors and potential customers, but long-term success really depends on the capabilities of the team.
It’s often said that investors typically look for an “A” team with a “B” idea rather than a “B” team with an “A” idea. The reason is that once you start developing an idea, things change, models need to pivot, and teams must be able to adapt. This makes a lot of sense because if all you have is an A idea and hit an obstacle, the venture fails. However, an A team can iterate until it finds success.
It’s easy to find examples of companies that started out with decent ideas, but their ultimate success was based on the team’s ability to be resilient and pivot. Zappos started out playing the role of the middleman. Rather than spending a lot of time and money on inventory and a fancy website, it simply put a few photos of shoes online to test the market. Over time, the Zappos team found that the key to encouraging people to buy shoes online was the free return. Because they were resilient, they were able to build on this strength to become a popular online retailer. Had buying shoes online not caught on, the team likely would have pivoted and tried something else.
Other examples include Amazon, which began with the idea to sell books online and evolved through the years to basically sell everything. FedEx began with the notion to deliver a package overnight, and Uber started with the simple idea of providing on-demand transportation. None of these were necessarily “big ideas” at first, but the teams adapted and grew to become major successes.
Only a good team can make this happen. When thinking about the team, there are several factors that founders need to consider. Here is a checklist to keep in mind:
Building A Core Team
How do you build a good core team? A big part of it is vision. The founder’s idea has to be good enough to serve as a lure for talent. Another part is the ability of the founder to recognize his or her own strengths and weaknesses—and to find complementary skills in team members. It’s also helpful to hire people who have done this before and made mistakes. They could be seasoned with years of experience or young and energetic, or a combination of both.
The Company You Keep
In addition to a core team, founders also need to build a strong external team, from advisors and partners to board members. After all, you are known by the company you keep. For instance, if a startup can convince a leading law firm or industry expert to advise the venture, that provides credibility, not to mention great insights.
Once the core team is in place, startups need to be careful about growing too fast too soon. A common pitfall is recruiting a team of great players after receiving funding, only to find that consumers have grown tired of the idea. It’s like putting together a football team and then realizing that what you really need now is a basketball team. When this happens, the startup often has two choices: get rid of the team, or convert them to the other model and hope they are good at basketball. This tends to burn a lot of money and turns the company’s focus inward to deal with people issues, blurring what should be the company’s laser focus on customers.
A third (and better) option is to only build the bigger team just in time for testing out your market. When you find the right product market fit, that’s when you start hiring, so that you know the skills required. To do this, entrepreneurs need a good network so they can tap the right people when the time is right.
Who To Hire
When looking at potential new hires, I’ve found that there are seven characteristics of highly effective entrepreneurial employees:
1. Ability to deal with risk. Can they deal with uncertainty?
2. Results oriented. Can they take ownership to get tasks done?
3. High energy. Are they enthusiastic and fully committed to the venture?
4. Growth potential. Will they be able to take on increasingly higher levels of responsibility?
5. Team player. Can they contribute to the overall efforts of the startup?
6. Ability to multitask. Are they flexible enough to accept new duties, assignments, and responsibilities?
7. Improvement oriented. Are they willing to challenge existing procedures and systems in a constructive way?
While every company will answer the questions raised in this checklist differently, it’s critical to go through the process to ensure that the right team is in place at the right time.Reprints | Share:
What’s the biggest, scariest threat facing the United States right now? I know for sure that it’s not immigration, free trade, or “radical Islamic terrorism.” And I’m going to resist the easy answer that it’s Donald Trump.
But I have a hard time deciding which of these two very real challenges is more urgent:
a) Slow economic growth—and just as bad, the unequal distribution of what gains there are—leading to a traumatic reset of the average American’s expectations for the future, plus spiraling bitterness and resentment over a “rigged system” that’s leaving the working class behind.
b) Climate change—the likelihood that greenhouse gas emissions will heat the atmosphere well beyond the 2°C limit envisioned in the Paris Agreement, given that the monthly global temperature record has been broken in each of the last 16 months, taking us most of the way to a 2°C increase within the first year after the Paris accord’s completion.
The difficulty is that both problems pose a threat to our way of life, so we can’t prioritize just one of them.
It would be fruitless to fixate on growing the economic pie, and/or slicing it up more equitably, if we knew that whole pie was about to be charbroiled by a shifting climate. But we also wouldn’t invest in battling climate change unless we were motivated by a belief that everyone—in current and future generations—deserves an equal shot at a safe, healthy, prosperous life on this planet.
But what if we don’t have to choose?
Maybe the two problems have a common solution. Maybe the massive investments needed to blunt the effects of climate change—in areas like zero-carbon energy and transportation technology and climate-change adaptation—are exactly the same kinds of investments we would make if we wanted to restore our aging infrastructure, strengthen manufacturing, provide millions of people with new skills, put them to work in rewarding jobs, and boost overall productivity.
It’s time to merge two disconnected conversations into one. The first is the quest among economists, historians, and technologists to identify the forces that power economic growth and divvy up the benefits. In particular, economists would like to explain the U.S. economy’s lackluster performance since 1970, after a century of explosive growth from 1870 to 1970. Thomas Piketty’s Capital in the Twenty-First Century put these questions in the spotlight three years ago, but they’ve been getting renewed attention thanks to Northwestern University economist Robert J. Gordon, author of a blockbuster text called The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (Princeton, 2015).
The second conversation is going on among climate activists, who fear that we’ll never be able to avert the worst effects of global warming through vague, Paris-style promises that nibble around the edges of the problem. What’s really needed, this group believes, is a society-wide mobilization of labor, technology, and innovation —the only precedent in American history being World War II. The main proponent of this argument is environmentalist and author Bill McKibben, whose August 2016 cover story in The New Republic, “A World at War,” makes electrifying reading.
If you haven’t read the Gordon book or the McKibben article, well, you’re in luck: I’m about to summarize them here. (But really, after you’re done here, go read them.)
The mission of The Rise and Fall of American Growth—an unlikely New York Times bestseller, at a dense 779 pages—is to reveal the full depth of the standard-of-living improvements that characterized what Gordon calls the “special century” beginning in 1870. (The changes were especially swift in the second half of that century, from 1920 to 1970.) Secondarily, Gordon asks why the productivity gains that drove these advances tailed off after 1970.
The technological leaps of the special century, which began with telegraphy and railroads and ended with mainframes and moonwalks, are obvious. But Gordon shows … Next Page »Reprints | Share:
In downtown San Diego, a private real estate company best known for its master-planned communities in suburban Southern California has posed some existential questions for regional tech hubs looking to build their own startup ecosystems.
For example: Can a 20-story office tower serve as a “vertical campus” and innovation hub for local tech companies?
Such campuses abound in Silicon Valley, in a sprawling, horizontal way. Google has the Googleplex, its campus in Mountain View, CA, with 3.1 million square feet of office space. About eight miles south, Apple has its headquarters at One Infinite Loop in Cupertino, CA, with an additional, spaceship-shaped campus that is more than a mile around expected to open by next year.
Can the Irvine Company accomplish something similar as the landlord at 101 West Broadway? It is an otherwise conventional downtown office building, with tenants like JPMorgan Chase and Gordon and Rees, a large law firm.
John “J.T.” Turner, a regional vice president at the Irvine Company, has been giving such questions a lot of thought in recent years.
“The roots of our company are in community-building on the residential side,” Turner said. Inspired chiefly by the tech industry’s move into downtown San Francisco and the rejuvenation of the “SoMa” neighborhood South of Market Street, Turner said the Irvine Company has been asking, “can we create the same sense of community in our office complexes?”
In San Diego, the Irvine Company provided the entire second floor of its Broadway Street building at no cost for the downtown EvoNexus incubator. The developer also provides rent-free space for a second EvoNexus incubator in University City (about a mile or so from UC San Diego) and a third EvoNexus incubator near UC Irvine that opened at the end of 2014.
In San Francisco, municipal tax incentives have helped the urban revitalization (and spurred local controversy) by luring big software companies like Twitter, Zendesk, Dropbox, and Salesforce to the city.
In San Diego, Turner counts his success in steps that are more modest, such as a “grand opening” of the new offices for MindTouch, a local software company that has taken the entire 15th floor at 101 West Broadway. The company moved in about four weeks ago.
After raising $12 million in its first venture round earlier this year to expand its business, MindTouch has grown to about 100 employees. The 11-year-old company provides customer relationship management software-as-a-service for companies like Electrolux, Whirlpool, and Samsung, helping them re-purpose their training materials and other “help content” to improve their customer experience.
While MindTouch already was based in downtown San Diego, CEO Aaron Fulkerson said he viewed 101 West Broadway as the center of the downtown tech community. A number of tech startups that graduated from the EvoNexus incubator have moved into other offices in the building. The Irvine Company also has created the ROC (as in Real Office Centers), a co-working space on the third floor that offers temporary offices, conference rooms, concierge services, high-speed Internet, and other business equipment and services.
In April, a study released by the San Diego Regional Economic Development Corp. (EDC) revealed that job growth in software development is exploding at three times the rate of overall job growth in the area. The study pegged the overall economic development of the software industry in San Diego at $12.2 million, with a regional workforce of 21,600 software developers and 19,660 related jobs.
At the MindTouch party Thursday evening, the EDC’s Jesse Gipe noted that more than half of San Diego’s software startups are located downtown, and “companies do show a fair amount of loyalty to the Irvine Company.”
“The tech community has helped us evolve as a company here,” Turner said. As tech companies have moved to operate as more of an “always on” business, and to cater more to the needs of elite programmers and other skilled employees, Turner said conventional companies “have come to realize that their workplace is more of an investment than an expense.”
In some cases, he said the Irvine Company now will provide month-to-month leases for startups, or a more economical lease structure that increases over time. “We’ve changed the way we view our customers, from landlord-tenant to more of a partnership.” At the MindTouch grand opening, Turner said they listened to what tech companies want, and what they need to attract and retain employees. By one account, Turner used the word “vibrant” 14 times while answering reporters’ questions at the event.
At 101 West Broadway, Turner said the Irvine Company has begun to provide the kind of amenities and infrastructure expected by tech companies and their employees, including discounted concert tickets, fitness programs, and food services. The Irvine Co. has re-branded the entire building as “The Vine,” a vertical campus with a goal to create what Turner calls “a vibrant workplace community.”
As one of the biggest landlords in Southern California, the Irvine Company has many advantages—including the fact that it is a private, multi-billion dollar business. Given the Irvine Company’s financial strength and market dominance, Turner said he believes time is on his side. “We’re not doing this to position a building for sale,” he said. “We have an endless time horizon. There is less risk for us, because we have the time to make it work.”Reprints | Share:
There are plenty of smart executives in the world, but they often make poor leaders. That’s because it takes both intelligence and maturity to excel at leadership. And when I say maturity, I don’t necessarily mean age, although generally more life experience is helpful. Maturity is the ability to manage oneself in challenging situations and to balance inquiry and advocacy about how to move forward.
It’s pretty easy these days to find examples of smart business leaders who lack maturity. Look at the irresponsible, off-the-cuff comments of Donald Trump and the messy wake his business dealings have left behind. Or, on the other side of the political aisle, Alan Grayson, who has been asked by other U.S. senators to end his bid for a Florida senate seat.
For a long time, researchers at MIT Sloan have talked about a 4-Capabilities Model of Leadership. The gist was that good leaders need to be able to do four things: visioning, relating, inventing, and sense-making. Visioning means providing direction and strategy; relating means connecting with people; inventing means creating processes, systems, and structures that enable execution; and sense-making is about understanding the world as a complex, dynamic place and trying to map it out with others.
While leaders need to do all four of these things, most executives are not great at all four. They tend to be good at some of them, but not others. That’s OK as long as leaders also have others with complementary skills around them and maturity. In our research, maturity tends to show up in four specific areas in which leaders know and manage themselves.
Pick yourself back up
The first is resilience. Leaders need the ability to pick themselves up after a setback. They can’t get too depressed for too long or it prevents them from enacting any of the 4 Capabilities.
Stay in control
Second, they need to be able to regulate their emotions. If they get angry or heated when challenged, they tend to lose people. But they can’t be automatons – they need to be able to share how they genuinely feel about challenges and opportunities if they are going to enroll and align others.
Adapt as needed
Third is an adaptive mindset. When they relate to people, they aren’t stuck in one way of thinking. They’re able to adapt when new data emerges, to admit mistakes and update their mental model of how the world works. Effective leaders are humble enough to be able to learn, but also confident enough to step up to challenges when they can add value.
The fourth area is confidence. Mature leaders are confident enough to see areas that need improvement and then step in to provide direction or a fix. It takes some courage to engage ambiguity and to develop hypotheses that might be proved wrong. Fear of failure often limits or prevents many people from leading and developing maturity for the future. Someone who’s confident (but not too confident) in their ability to step into the unknown – to make a difference on a challenging problem where answers are not obvious – has been a hallmark of leaders who have developed sustainable businesses. Examples include Ray Stata of Analog Devices and Amar Bose, to name just two.
So how do you develop maturity? The easiest way is to put yourself in a position of leadership. You won’t learn anything if you won’t get your hands dirty and aren’t willing to make mistakes. Try raising your hand at the office when leadership is needed – but make sure you are then willing to do the work.
It’s also important to reflect on your experiences. Ask yourself what you noticed about your leadership efforts. Was there something about the way you reacted to other people? Are there any triggers that set you off? If so, can you learn to manage them in the future? For example, many leaders are impatient when their ideas aren’t quickly accepted. If you can manage that impatience, you may be able to bring more people along on the kinds of journeys that are required to solve problems worth solving.
While not everyone can be a world-class leader, everyone can be a better leader. The good news is that even small improvements in leadership can produce substantial outcomes. We’ve found that even a 3-5 percent improvement in leadership capability and maturity is noticeable. If you can get a little bit better in the 4 Capabilities, as well as the four areas of self-knowledge/management, it can make a big difference to you and your organization’s success.Reprints | Share:
When the Olympics roll around, many watchers get into a sport they previously hadn’t thought much about. This time for me, it’s volleyball.
The men’s and women’s games, both indoor and beach versions, are fast, aggressive, with lightning-quick adjustments and subtle teamwork required every time a ball is dug out and popped in the air. The best part, though, are the rejections. Just like in basketball, there’s nothing more dramatic than emphatically denying an opponent a chance to score. And once in a while, a defender uses his or her face, inadvertently, to block a ball spiked over the net. Talk about sacrifice.
If drug approval were an Olympic sport, rejections would also be high drama. All those years of hard work to reach the promised land, then just as a drug owner is ready to spike it home and take a victory lap, the FDA’s hands rise over the net… OK, it’s not a perfect analogy, but it’s better than comparing the patent fight over the gene editing system CRISPR-Cas9 to table tennis. (Be our guest and try it.)
The CRISPR news this week doesn’t need a metaphor; the drama that MIT Technology Review reported can stand alone. We’ll get to that, and to a busy week of drug rejections, trial failures, lawsuits, and more. Time for the gold-medal roundup.
—Rejections: The FDA denied approval of Chiasma’s lead drug, for acromegaly, in April and asked for more data. Waltham, MA-based Chiasma (NASDAQ: CHMA) announced plans to slash 44 percent of its workforce… Portola Pharmaceuticals (NASDAQ: PTLA) of South San Francisco, CA, said the FDA needs more information to make an approval decision about andexanet alfa (AndexXa), an emergency drug that reverses the effect of blood thinners. Shares were down 14 percent mid-day Thursday.
—The FDA last summer approved two new cholesterol fighting drugs known as PCSK9 inhibitors, but so far the market has rejected them, resulting in paltry sales. Everyone is waiting until 2017, when huge studies of the drugs’ ability to prevent heart attacks and strokes start to provide data. Meanwhile, the latest study reporting that the drugs’ $14,000-a-year list price isn’t cost effective, published this week in the Journal of the American Medical Association, has the drugs’ owners, Amgen (NASDAQ: AMGN) and Regeneron Pharmaceuticals (NASDAQ: REGN), up in arms.
—MIT Technology Review reported this week that a graduate student in the lab of Feng Zhang, Broad Institute gene-editing star, had accused the Broad of misleading the U.S. Patent Office in its successful push to get pioneering patents for the CRISPR-Cas9 gene-editing technology. The student, Shuailiang Lin, was in Zhang’s lab at the time but has since moved on to the University of California, San Francisco. Lin made his claims in an email to University of California, Berkeley professor Jennifer Doudna, Zhang’s rival in the dispute over who invented key aspects of CRISPR-Cas9. The email has surfaced in Berkeley’s filings as part of its patent fight with the Broad. The fight is more expensive than expected: Editas Medicine (NASDAQ: EDIT), which has licensed the Broad patents, has spent nearly $11 million this year so far on legal fees helping the Broad and Harvard University. STAT found the figures in Editas’s quarterly earnings report.
—In other CRISPR news, Bayer and CRISPR Therapeutics have christened Casebia Therapeutics, the name for the joint venture the two established through their $335 million partnership last year. Casebia is developing gene editing drugs for blood disorders, blindness, and congenital heart disease, and has leased 33,000 square feet of lab space in Cambridge to set up shop.
— Radius Health (NASDAQ: RDUS) published Phase 3 trial data for its experimental osteoporosis drug abaloparatide, which is currently under FDA review. Amgen is expected to ask FDA for approval of a rival osteoporosis drug, romosuzumab, later this year. Here’s more on Radius’s drug and osteoporosis care from the New York Times.
—More Phase 3 news: Boston-based Vertex Pharmaceuticals (NASDAQ: VRTX) said one of the four Phase 3 trials testing the experimental cystic fibrosis drug VX-661 with ivacaftor (Kalydeco) failed and is being shut down. The combination is meant to improve upon Vertex’s approved pairing of CF drugs ivacaftor-lumacaftor (Orkambi), and Vertex is testing it in a variety of genetic subsets of CF patients. Data from the other three trials should come in late 2016 or early 2017.
—Terrible (Phase) Twos: Shares of Waltham-based Cerulean Pharma (NASDAQ: CERU) fell more than 60 percent after its nanoparticle cancer drug, CRLX101, failed its second Phase 2 trial, this time in kidney cancer. Cerulean later announced plans to slash 48 percent of its workforce by the end 2016… A cancer drug developed by OncoGenex Pharmaceuticals (NASDAQ: OGXI) also flubbed a second Phase 2 trial, leading the Bothell, WA, company to explore … Next Page »Reprints | Share:
San Diego’s Avelas Biosciences, founded in 2009 to advance a fluorescing biologic agent intended to help surgeons differentiate cancerous tissue from healthy tissue, has completed a $20 million Series C round of venture funding.
Pharmstandard International, the Luxembourg-based investment arm of the Russian pharmaceutical giant Pharmstandard (and a first-time investor in Avelas), led the round. It was joined by two other new backers, Ervington Investments and Alexandria Venture Investments, and previous investors WuXi Healthcare Ventures, Bregua Corp., and San Diego’s Avalon Ventures.
Inbio Ventures, a venture capital management company, represented Pharmstandard in the deal.
Avelas plans to use the new funding to advance development of AVB-620, the company’s lead diagnostic agent, for use in breast cancer surgeries, CEO Carmine Stengone told me yesterday. Stengone said the new funding also will help the company evaluate the use of AVB-620 in other types of cancer surgery, to advance new cancer drugs that rely on Avelas’ proprietary technology, and to expand the company’s current roster of “seven employees and an army of consultants.”
Avalon Ventures founded Avelas, and has housed the startup with other Avalon biotech startups at its COI Pharmaceuticals R&D facility in San Diego. The company also is planning to relocate to new offices, Stengone said.
AVB-620 is a fluorescing peptide that glows under UV light in tissue containing high levels of protease, an enzyme that breaks down proteins and peptides. Tumors secrete excessive amounts of protease, so a peptide that fluoresces in tissue with high protease activity could be used to help a surgeon tell the difference between healthy and cancerous tissue.
Avelas licensed its core technology from the UC San Diego lab of Roger Tsien, who shared the 2008 Nobel Prize in chemistry for the discovery and development of the green fluorescent protein. The first-in-human trials of AVB-620 began last year at UC San Diego’s Moores Cancer Center. Avelas reported positive interim results three months ago from the early stage, proof-of-concept trial, which has been taking place at Moores, Stanford University, and UC San Francisco, Stengone said. The company reported interim results in May that showed no toxicity issues with AVB-620, and found that surgeons could tell the difference between cancerous and non-cancerous tissue. The Phase 1b study also determined a preferred dose for the next stage in the study.
The study also generated “some compelling pre-clinical data” on the potential use of Avelas’ cell-penetrating peptide molecule as a way to deliver toxic chemotherapy drugs inside cancer cells, Stengone said. “There are broad-ranging implications for our platform, from delivering fluorescing peptides to therapeutic disease management,” Stengone said.
In conjunction with the financing, Avelas said Andrei Petrov has joined the company’s board of directors. He is the CEO and managing partner at Inbio Ventures. Avalon Ventures founder Kevin Kinsella plans to step down as a director of the company, along with Nikolay Savchuk of Torrey Pines Investment. Avalon partner Jay Lichter plans to continue serving as Avelas’ chairman, Stengone said.Reprints | Share:
Histogen, a San Diego-based regenerative medicine company with technology for growing skin cells and related products, said it has raised $6 million from an affiliate of Huapont Life Sciences, a healthcare products company based in Chongqing, China.
The $6 million anchors Histogen’s plans to raise as much as $18 million in a Series D financing round, according to Histogen spokeswoman Eileen Brandt. She described the initial funding from Huapont as a strategic investment, as Histogen plans to work with the Chinese pharma conglomerate to make and distribute its lead product in China.
Histogen also plans to use the funding to begin preparations for an initial public stock offering, according to a statement. Including the $6 million from Huapont affiliate Pineworld Capital, Histogen has raised a total of roughly $33 million since the company was founded in 2007.
Histogen’s lead product, known as Hair Stimulating Complex (HSC), is an injectable liquid that combines cultured skin cells with cell growth factors, special proteins, and other cell-secreted molecules. The company uses a so-called “bioreactor” to grow skin cells, growth factors, and other related compounds under simulated embryonic conditions.
Histogen claims that HSC triggers stem cells in the scalp to form hair.
Histogen said it plans to negotiate a license and supply agreement for the development and commercialization of HSC in China. As part of the funding deal, Huapont’s Hayden Zhang will join Histogen’s board of directors.
Huapont Life Sciences’ pharmaceutical business includes dermatology products, cardiovascular products, anti-tuberculosis agents, autoimmune-related products, and oncology-related products. The Chinese company has about 7,100 employees, and generates annual revenue equivalent to roughly $1.1 billion.Reprints | Share:
A recent Wall Street Journal article that raised the possibility of Biogen as the target of another huge pharma buyout cited the lack of productivity as a major driver of M&A in the pharmaceutical industry. The authors made the point that, given the size of companies today, a single garden-variety blockbuster hardly moves the needle.
The increasing need for new drugs is intense. The industry can only go so far with growth through hyper-inflated pricing and mega-M&As. At some point pharma has to figure out how to make more drugs more efficiently, or face major dislocations like business-destroying price controls. It is the hope of new blockbuster drugs that keeps government regulators at bay.
An obvious place to look for help is the venture community—Bruce Booth of Atlas Ventures pointed out in a recent blog that venture capital is doing well, and is positioned to do even better in the future. Yet despite relative plenty in the bio-venture community, pharma suffers from a shortage of drug candidates.
A recent Silicon Valley Bank report noted that large corporations have dramatically increased pre-clinical acquisitions in the last three years under the pressure of limited supply and competition from IPOs. Early acquisitions force pharma to take more risk and spend more of their operating budgets on development over a longer time than buying post-phase II, where they can more efficiently deploy large-scale resources.
What Booth didn’t say explicitly is that providing only a limited supply of drug candidates in the face of increasing demand is a key element in the venture investment model. The quickest way to kill industry profits is to try to put too much money to work. Losses in over-capitalized “vintage years” over the last two decades have left institutional investors (e.g. pension funds) with little appetite for experimentation with new managers and more funds.
With a limited supply of new firms coming into the business, venture’s ability to expand to meet demand is inherently constrained. A 2011 white paper by Kevin Lalande of Santé Ventures explains why the … Next Page »Reprints | Share:
The wait continues. An FDA ruling on a Duchenne muscular dystrophy drug from Sarepta Therapeutics—which could be the first ever approved for the disease—has been imminent for a while now, yet Labor Day is fast approaching and still the saga drags on. Speculation abounds, from analysts and pundits, each giving different opinions as to whether the delay means good or bad things for Sarepta and Duchenne patients. Will next week be the week a decision finally comes? Next month? Later today? Until then everyone sits, waits, and speculates. That story and the rest of the week’s biotech headlines below.
—The U.S. government’s Precision Medicine Initiative is an ambitious effort to collect the genomic data of 1 million Americans, and tech giant Alphabet (NASDAQ: GOOG) is deeply involved. Alex Lash examined the company’s role, via its biotech subsidiary Verily Life Sciences, in the massive project. In other Google-related news, Recode reported that Bill Maris, the founder and president of Google Ventures (now called GV), has left the firm and will be replaced by David Krane.
—David H. Koch Institute for Integrative Cancer Research founding director Tyler Jacks has spent decades making important contributions in cancer research, but until forming Cambridge, MA-based Dragonfly Therapeutics, he’d never spun a startup out of his own lab at MIT. Xconomy spoke with Jacks and CEO and longtime tech entrepreneur Bill Haney about the venture, a cancer immunotherapy startup that is relying on funding from family offices—among them the Disney family—rather than venture firms.
—Option-to-buy deals are by definition no guarantee, and an agreement between Boston-based Acetylon Pharmaceuticals and Celgene is the latest example. Celgene paid Acetylon $100 million in 2013 for an option to buy the company outright, but the deal recently expired without an acquisition, leaving Acetylon to chart a new course. Celgene remains an Acetylon investor, however, and the two are testing drugs together in a variety of trials.
—Indianapolis-based Eli Lilly (NYSE: LLY) said that a breast cancer drug it’s been developing called abemaciclib didn’t meet a predetermined interim efficacy bar in a Phase 3 trial. Lilly will continue the study, but the news puts distance between abemaciclib and two similar, rival cancer drugs from Pfizer (palbociclib (Ibrance)) and Novartis (ribociclib)). Both Pfizer and Novartis stopped Phase 3 trials of their drugs early because they were clearly benefitting breast cancer patients. And Pfizer’s is already on the market, and generated $514 million in the last quarter alone.
—The status of Sarepta Therapeutics’ (NASDAQ: SRPT) Duchenne muscular dystrophy drug eteplirsen remains in regulatory limbo, and the Wall Street Journal published this editorial speculating that a “differing-professional-opinions” proceeding—how the FDA clears up internal scientific disputes—might be holding it up. Meanwhile, the FDA agreed to review an approval application for deflazacort, a steroid that Marathon Pharmaceuticals, of Northbrook, IL, is advancing as a potential Duchenne treatment.
—Heron Therapeutics (NASDAQ: HRTX) won FDA approval of granisetron (Sustol), a drug it developed for the nausea and vomiting associated with certain chemotherapy regimens. The news was a relief for Redwood City, CA-based Heron, which has been waiting for word on the status of its drug since September 2015.
—Biogen (NASDAQ: BIIB) disclosed the name for its coming hemophilia-focused spinoff: Bioverativ. The new company, expected to launch in 2017, will trade on the Nasdaq under the symbol “BIVV” when the split is complete. Its financials were posted here.
—Inflammation drug developer Aldeyra Therapeutics (NASDAQ: ALDX) reported positive results from another mid-stage trial, this time in patients with a rare skin condition called Sjogren-Larsson Syndrome. Lexington, MA-based Aldeyra’s drug, NS2, has already succeeded in two Phase 2 trials for two different eye diseases.
—Kite Pharma (NASDAQ: KITE), of Santa Monica, CA, said that it could file for FDA approval of an experimental treatment known as KTE-C19 by the end of 2016—meaning there’s a chance Kite could be the first to market with a “CAR-T” product, a form of cellular immunotherapy for cancer.
—This week’s gene therapy news: MIT Technology Review reported that Strimvelis, the gene therapy recently approved in Europe and given a $665,000 price tag, has a money-back guarantee if it doesn’t work. In the U.S., Philadelphia-based Spark Therapeutics (NASDAQ: ONCE) bolstered the data it has for genetic blindness treatment voretigene neparvovec, which has a chance to become the first gene therapy approved by the FDA. Its application for approval won’t be completed until next year, however—a delay from previous expectations.
—Financings: AstraZeneca disclosed that it’s invested $140 million more into Cambridge-based Moderna Therapeutics and brought its stake into the privately held messenger RNA company up to 9 percent… Celgene took part in … Next Page »Reprints | Share:
The app that you use is the one in your pocket. Today, larger mobile screens and touch interfaces are allowing people to do real work—not just e-mail—with the computer they have, wherever they are.
It started with the Blackberry in the early 2000s. Like a dream, or a nightmare, e-mail—which is still the go-to work productivity app—became 100 percent mobile, available anytime you wanted or needed, day or night. Behaviors started to shift. For avid thumb-typers, it was easier to just use your mobile phone to read and respond to e-mails than to wait until you were back at your desktop PC or laptop.
Fast-forward to the iPhone and the smartphone explosion in 2008 with the launch of the App Store. With the iPhone and next Android smartphones, the stage was set for more change and a new frontier for mobile applications for doing work.
But First iPad
The screens were still pretty small in those early years, the iPad arrived in 2010, and with it a bigger touch canvas to do real work. Evernote immediately made a mark by building its iPad version in 60 days. Paper launched in 2012, and though it is a drawing and sketching app, it proved that relatively complex work could be done on the iPad, leveraging the touch interface and larger screen.
In 2012, along with Paper, several innovative productivity apps launched including Wunderlist, Notability, Haiku Deck, and many more. These apps were designed for the bigger screen and optimized for touch, leveraging specific aspects of the iPad’s design.
In the following years, big and small companies alike launched productivity apps that were built first for the iPad including Concepts, FlowVella (my company’s app), Quip, and Domo. This next crop of apps were aimed at reinventing CAD, presentation software, and business intelligence software by rethinking the user experience for the new touch interface.
Smartphone Productivity App Insurgence
In the last 3 years, bigger smartphones have taken over. Android devices by Samsung, HTC, and others pushed the size to the now default 5- or 5.5-inch screen. The iPhone 6 and 6Plus arrived in late 2014, combined with the Android market, to usher in a new reality of computing potential in your pocket or purse.
In the last year, more and more productivity apps have launched for the iPhone. Paper launched an iPhone version. Google has made major improvements to its office suite on iOS. Microsoft fully embraced the mobile platforms of two of its biggest competitors and is putting real effort into its productivity apps for iOS and Android. Smaller players, too, are expanding their offerings from the iPad to the iPhone.
Our reason for doing so with FlowVella wasn’t that we think people now want to create and author entire presentations on their phones exclusively. But as more and more people are carrying powerful computing devices with them all the time, they should be able to use that power to start their creative process, ideate, and edit in the productivity app of their choice, on the go. It’s part of an ongoing transition. As bigger mobile computer screens and touch interfaces proliferate, work will increasingly shift to mobile phones because people will do work on the computer that is always with them.Reprints | Share:
The U.S. government has ambitious plans for a long-term health study with one million Americans, and one of the world’s most powerful tech companies has a big part to play, including the storage of all the data on its “cloud” servers.
Google’s parent company Alphabet (NASDAQ: GOOG) and its wholly owned biotech R&D group, Verily Life Sciences, are helping build a secure center where health records, genomic data, and other personal information from hundreds of thousands of people can be collected, analyzed, and shared with health researchers. The federal initiative is expected to generate a trove of health information, to be gathered from “a rich diversity” of volunteers across the country, as National Institutes of Health director Francis Collins noted last month.
While many details remain vague, Google’s deep involvement comes as other key participants in the national effort—called the Precision Medicine Initiative—are raising concerns about the growing reach of tech giants like Google and Apple (NASDAQ: AAPL) into healthcare.
Those concerns are shared by the public. In a survey published this summer by digital health investment firm Rock Health, respondents were generally positive about sharing their health records and genetic data. But they did not view tech companies as trustworthy stewards. In fact, tech companies shared the lowest marks along with government, which underlines one of the national study’s big question marks: how quickly will people sign up for an effort whose premise—the more volunteers, the deeper the insights into ever-more tailored medical treatments and preventive health—requires mass participation?
Collins, whose organization is overseeing much of the initiative, raised the question last month, even as he announced a goal to start recruitment by November, only four months away. “We’re curious to know whether we’ll be deluged or have to work harder to get the word out,” Collins said.
PMI officials acknowledged the importance of gaining the public’s trust. “It’s front and center in every decision we’re making,” said Gwynne Jenkins, the chief of staff for the PMI cohort program, the team building the volunteer database.
To be clear, health data that citizens contribute to the study will be open for research under the purview of the government—not held privately by Google or the other two dozen entities that are building and running the four cornerstones of the PMI.
Only a few of those entities are for-profit companies; Google, via Verily, is the highest-profile. Its participation was first publicly revealed in February, when the Obama administration unveiled a pilot project run by Vanderbilt University and Verily to test volunteer attitudes and potential recruitment strategies. The two organizations were going to build an online “portal”—a term from the old dot-com days that described the efforts of Yahoo, Microsoft, and others to attract Web surfers with search, news, and other information. Verily chief medical officer Jessica Mega said in June her group was well suited to help because of its experience with user interfaces and “the right cadence of engaging people.”
Verily’s role has since shifted, however. When Collins announced in July the four multi-million-dollar cornerstone PMI projects, the Vanderbilt-Verily group was put in charge not of recruitment but of an entirely different piece: a coordinating center, headquartered at Vanderbilt’s medical center in Nashville, TN, that will gather all the data generated by the nationwide study and make the information available to researchers. The first year of the grant for the Data and Research Support Center is worth $13.6 million, with potentially $72 million over five years. Vanderbilt is the lead contractor.
It was “always the plan” to apply for the coordinating center job, said Vanderbilt associate professor of biomedical informatics Joshua Denny, the school’s PMI point man. Vanderbilt had a head start stumping for it. A top spot for health informatics research, the school already houses a national research center for electronic medical records and genomics, funded by the NIH’s National Human Genome Research Institute.
Joining Vanderbilt and Verily is the Broad Institute of Cambridge, MA. The Broad will contribute its expertise generating and working with vast genomic data sets, as well as sophisticated tools to help researchers make sense of the data the PMI aims to collect.
So where does Verily fit in? Its parent company does data infrastructure and analytics like few other entities on Earth. Vanderbilt’s Denny told Xconomy that the PMI data center would use the Google Cloud data storage platform. (Google has a division of its cloud business tailored to genomics data. It even has a price guide.)
But Verily itself is best known as a kind of blue-sky lab for device-centered health projects, such as a “smart” contact lens to monitor a diabetic’s glucose level, or electro-implants to rewire a patient’s disease. It’s the life science version of the Google X think tank that has produced Google Glass and the self-driving car initiative.
Verily also aims to run its own long-term health study, called Baseline, which is not affiliated with the PMI. But why it, and not Google, needs to be a front-facing entity on the PMI data center project—even one dedicated to healthcare data—is less clear.
Verily officials insist that their group, not Google, be identified as the PMI contractor. When asked what health expertise Verily would bring to the table beyond Google’s data management systems, officials with Verily (and everyone else Xconomy interviewed for this article) were quick to caution … Next Page »Reprints | Share:
On the day after Intel announced its acquisition of San Diego machine learning startup Nervana Systems, investor Steve Jurvetson told me he was feeling a sense of satisfaction about a call he made three years ago, and how it has been playing out.
In a 2013 panel discussion at Silicon Valley’s Churchill Club, the DFJ partner said “machine learning” was his pick as the most important tech trend to watch for the next three to five years. “Just about anything you’ve heard [about] at Google that sounds interesting and new is based on machine learning,” Jurvetson said at the time. “Everywhere, technology is starting to percolate into an otherwise prosaic, non-tech industry—apply big data, apply machine learning—and revolutionize it.”
Just over a year later, Jurvetson led the Series A round of venture funding for Nervana Systems. Now, more than two years after Nervana was founded, Intel (NASDAQ: INTC) has endorsed Jurvetson’s top tech trend of 2013 by acquiring Nervana in a deal reportedly valued at more than $408 million (according to Recode).
“It’s not that often in a VC career you get to work with teams you’re sure will be featured in documentaries about how major industries changed,” wrote Matt Ocko of Data Collective Venture Capital, which joined DFJ in Nervana’s initial venture funding. “We can’t wait to see their next set of breakthroughs, delivered at even greater speed, with Intel behind them.”
(In the 2-1/2 years since it was founded, Nervana raised roughly $25 million. In addition to DFJ and Data Collective, other investors include Playground Global, CME Ventures, Lux Capital, Allen & Co, AME Cloud Ventures, Fuel Capital, Omidyar Technology Ventures, SV Angel, and unnamed seed investors.)
Nervana Systems co-founders (and Qualcomm expats) Naveen Rao, Amir Khosrowshahi, and Arjun Bansal set out to develop new artificial intelligence technology that emulates the human brain, where thousands of synapses transmit information between each neuron. The co-founders integrated their specialized expertise in neuroscience, distributed computing, and networking . As CEO Rao wrote in a blog post Monday, “Nervana started with the idea that we can engineer better solutions for computation by bringing together computer engineering, neuroscience, and machine learning.”
Rao added, “With this acquisition, Intel is formally committing to pushing the forefront of AI technologies.”
As Jurvetson drove between meetings yesterday afternoon, he said machine learning continues to be a top tech trend. In a self-described “sweeping generalization,” he declared that the new generation of iterative algorithms in computational mathematics that are being applied in machine learning, directed evolution, and generative design “is the most important advance in engineering since the scientific method.”
Nervana initially developed a software-based model of its technology, based on Nvidia graphics processors. Earlier this year, Nervana began offering its AI technology in the cloud to business customers, using a software-as-a-service model. For example, Nervana’s Web-based software has been used to help Paradigm software analyze prospective oil and gas fields, identify irregular trading patterns for the Chicago Mercantile Exchange, and enable Blue River Technology to refine its computer vision technology for use in agriculture.
At the same time, Nervana has been advancing its machine learning technology on a different front by developing a new type of semiconductor architecture based on the company’s neural-based approach to AI.
A Nervana “AI semiconductor” would appear to be ideally suited for Intel, as it enables the chipmaker to integrate machine learning into the silicon of Intel’s proprietary chip design—instead of running in the software atop graphics processors made by Nvidia and other chipmakers.
In a blog post that recaps the Nervana story, Jurvetson writes that one of the pre-eminent engineers hired by Nervana figured out how to rework the undocumented firmware of Nvidia’s processors to run deep learning algorithms faster than off-the-shelf GPUs “or anything else Facebook could find.”
Nervana says the souped-up capabilities of its Neon software framework enable it to run 10 times faster on Nvidia processors—faster even than Nvidia’s own software framework. While speed is always important in computer processing, it becomes especially important in machine learning, which rely on iterative algorithms that allow computers to learn patterns and data without explicit programming instructions.
Jurvetson writes that similar innovations in Nervana’s chip design will enable the company’s forthcoming chip to perform 55 trillion operations per second, with multiple high-speed interconnects typically seen in the networking industry making it possible to tie “a matrix of chips together into unprecedented compute fabrics.”
Nervana, which now has 48 employees, plans to remain in San Diego and operate under its own brand name. Combining Nervana’s expertise in artificial intelligence with Intel’s capabilities, technology resources, and huge market reach, Rao wrote, “will allow us to realize our vision and create something truly special.”Reprints | Share:
When Xconomy convened a dinner discussion earlier this year that included prominent San Diego cybersecurity innovators, startup founders, and system administrators, I was stunned to learn that Gary Hayslip oversees an IT network that blocks an average of 800,000 cyber attacks a day.
Hayslip is deputy director and chief information security officer (CISO) for the city of San Diego. He oversees a web of government computer networks that enable city residents to pay their parking tickets, submit bids on city contracts, and make online payments for city taxes and sewer fees.
Many of the 800,000 daily attacks on the city of San Diego are the result of automated tools “that are just running out on the Internet,” Hayslip said. Some of them are sophisticated attempts to access city networks. In any case, Hayslip is the one responsible for guarding the city’s data networks against intruders.
From time to time, Hayslip brings in new technologies from local cybersecurity startups. “When we partner with a startup,” he said, “part of the agreement is we receive the technology for free for one year. They get to use the city as a test bed, and my team works with their teams to help develop their technology. At the end of the year, if we decide to keep them, we negotiate a new contract and become a paying customer.”
Hayslip recently responded to e-mail questions from Xconomy about the city as a cybersecurity test bed. His answers have been condensed and edited for readability.
Xconomy: Can you describe the state of cyberwar between hackers and government websites like the city of San Diego’s?
Gary Hayslip: First off, I want to state there is not a “State of Cyberwar.” Cities are businesses. We have many of the same components a private business contains, and because of that we are a target. We also happen to be a business that is public and required to state when we have breaches, so many of our issues are more public than a private business that may keep their issues in-house.
With that said, there is an increase of cyber-attacks against public organizations, whether it is cyber activists or criminal organizations looking to steal and/or ransom information. The one point I want to make here is that we are in a cyber cold war, one side innovates and does damage, steals information, etc. Then the other side innovates, and comes up with new technologies to attack or defend itself. I don’t believe there is going to be a winner. This will be a long struggle between vague “us vs. them,” and I don’t see it changing anytime in the near future. Until we are able to solve the monetization of stolen data issue—i.e., encrypting data and demanding a ransom—we will be in this struggle. Organizations must understand that if you are connected to the Internet, you are involved whether you know it or not.
X: What cybersecurity companies have used the city of San Diego as a test bed?
GH: We currently have partnerships with PacketSled, AttackIQ, Cyberflow Analytics, and PivotPoint Risk Analytics. We are actively involved with all four companies.
We use PacketSled as part of our overlapping security controls to assist us in seeing an attack as it develops, and to help us document any indicators of compromise so we can remediate the issue or block the attack entirely. One thing we found interesting about PacketSled technology is that it gives you an amazing view into an attack sequence, and you can replay it—similar to a digital video recorder (DVR)—so you can gain a better understanding of what is happening and coordinate your response to the issue. It integrates well with many of our other technologies. It’s not a tool to replace everything. It’s a solution that helps make them more relevant, and it provides better situational content during a cyber incident.
AttackIQ is a platform of attack scenarios that we use via lightweight sensors to test our networks’ security and to verify our controls and whether we need to make adjustments.
Cyberflow Analytics is technology we have installed in the core of our networks that provides risk analytics of user behavior on computer systems and other assets installed in the interior of our enterprise.
The last partner is PivotPoint Risk Analytics. This solution takes in our technology, security controls, and provides a risk baseline. It can actually provide us a dollar amount for the cost of a breach, based on the technology and security control decisions we have made as an organization. All four of these solutions provide an extra piece to the overall security puzzle I am in charge of implementing for the city of San Diego.Reprints | Share:
Apple’s iPhone 7 is due out next month. According to the Wall Street Journal, PFWTMs (“people familiar with the matter”) say the new device will look pretty much the same as the iPhone 6s. The biggest change: no more headphone plug. Customers who want to listen to music or podcasts on their iPhones will need to get Bluetooth earbuds or new headphones with Lightning connectors.
Doesn’t sound like much of an innovation. (Or is it? I’ll come back to that below.) The first point to acknowledge is that if the reports are right, it would be the first time Apple has departed from its traditional two-year upgrade cycle. Redesigned iPhones typically come out in even-numbered years. 2015 saw the introduction of the iPhone 6s, a minor makeover of the previous year’s iPhone 6. So, going by the traditional schedule, the 2016 iPhone would have been a major refresh, perhaps helping to reverse this year’s slowdown in sales of iOS devices.
So, what’s going on inside Apple? And what does this portend for the future of mobile interfaces?
One interpretation is that smartphones have reached the Plateau of Near-Perfection.
Already on that plateau are products like the commercial jet airliner, which hasn’t changed much since Boeing introduced the 747 in 1970. Planes have evolved on the inside through the addition of features like all-glass cockpits and fly-by-wire software. But in essence, aircraft builders have concluded that there’s only one efficient design for an aluminum airframe riding on gas-turbine engines, and it’s the one we’ve got.
Maybe we’ve reached the equivalent point in smartphone design, where the devices already do everything we need them to do. An iPhone is an alarm clock, a camera, a pager, a game console, a compass, a map, an audio and video recorder, a phone, and a Dick Tracy two-way video link. It’s hard to imagine what new capabilities could be added to this Victorinox of gadgets.
Or maybe that’s all wrong. It could be that there’s still plenty of room for new features, but Apple is simply taking a longer breather between upgrades.
The company might be planning something splashy for 2017, the 10th anniversary of the original iPhone. According to the same PFWTMs, Apple designer Jony Ive wants to get rid of the iPhone’s bezels and use an edge-to-edge OLED screen to make the device look and act like a single sheet of smart glass. That sounds cool, but tricky. It would be understandable if it took an extra year.
But I suspect something more is going on. Yes, designing an edge-to-edge display might involve some tough hardware challenges. But my bet is that the seeming slowdown in the iPhone iteration cycle isn’t primarily a hardware issue. It’s more like a synchronization problem. Maybe, before phones can get smarter, software engineers have to get smarter.
Let me explain. What made the original iPhone so groundbreaking was a remarkable convergence of hardware and software innovation. It was the first device to feature both a phone-sized touchscreen and a new interface that made the screen intuitive and delightful to use. The combination opened up so many possibilities that app builders have now spent the better part of a decade exploring them.
We may not see another great leap in mobile technology—one that supercharges the whole category, the way the first iPhone did—until someone comes up with a similar synthesis of hardware and software innovation.
The big limitations right now aren’t on the hardware side. Microprocessors have speed to burn. Batteries last all day. Every year, phones get better displays and better cameras. With 5G broadband, wireless connections are about to get a lot faster.
No, what’s missing is an organizing idea—a new way of packaging and interacting with the information on our mobile devices. Something that will make iOS look as primitive as the operating system on a 2003 Treo or Blackberry.
And here’s my big prediction: that idea is Siri. Or rather, her future offspring. To make the next leap, Apple and its competitors need to … Next Page »Reprints | Share:
Talk about auspicious timing. It’s been less than a year since Needham, MA-based PTC (NASDAQ: PTC) shelled out $65 million to acquire Vuforia, the augmented reality technology created by San Diego-based Qualcomm (NASDAQ: QCOM).
Qualcomm had worked to develop its Vuforia technology for at least five years before a maturing smartphone market and new economic realities led to the sale. Of course, as Xconomy noted last year, there also were precious few examples of mobile games or ads that became a runaway success because of the way they used augmented technology.
But now there is an exceptional example.
Last week, the mobile app market research firm Sensor Tower estimated that Pokémon Go has generated over $200 million in worldwide net revenue for its creators since July 6, when the free mobile game was launched. As mobile marketing executive Eric Mugnier recently observed in VentureBeat, “Pokémon Go has amassed more downloads, headlines, revenue, and memes than anyone could have predicted.”
Under the circumstances, it seemed like an apt time to check in with former Qualcomm vice president Jay Wright—who is now president of PTC’s Vuforia business—to see how the augmented reality business is going and how Pokémon Go is reshaping the industry.
PTC completed its Vuforia purchase last November as part of a broader initiative to build a new platforms business through a series of acquisitions and organic investments., Wright said. Among other things, PTC has invested nearly a $1 billion on Kepware for industrial connectivity, ThingWorx for IoT, and Vuforia for augmented reality. He described them as “natural extensions” of PTC’s already successful CAD, Product Lifecycle Management, Application Lifecycle Management, and Service Lifecycle Management businesses.
Vuforia’s headquarters has remained in San Diego, and Vuforia continues to operate four offices in Europe and Israel, Wright said. His e-mail responses to my questions have been edited for readability.
Xconomy: Did you know Niantic was working on Pokémon Go when PTC acquired Vuforia?
Jay Wright: I was familiar with the company and their success with Ingress [Niantic’s augmented-reality massive multiplayer online location-based video game], but was as surprised as everyone with the incredible Pokémon Go phenomenon. It has created a new wave of interest in AR, and has certainly spurred additional growth in the Vuforia ecosystem.
X: Has PTC’s vision for Vuforia and augmented reality changed as a result?
JW: Vuforia’s mission is to democratize augmented reality development. As part of that mission, we focus on solving the really hard problems, and making simple solutions available that everyone can use. Prior to the acquisition, we focused primarily on computer vision. Computer vision gives devices the ability to “see” things.
JW: Now that we’re at PTC, the mission … Next Page »Reprints | Share:
After reporting encouraging news last week from a mid-stage trial of its lead anti-cancer drug, San Diego’s MEI Pharma (NASDAQ: MEIP) said it has signed a drug development deal with the Swiss pharmaceutical group Helsinn that could eventually be worth over $464 million.
Under terms of their agreement announced today, Helsinn will pay MEI $15 million upfront, with another $5 million due after a pending Phase III study of the drug, pracinostat, begins for certain older patients who are diagnosed with acute myeloid leukemia (AML). The remaining $444 million depends on meeting future development, regulatory, and sales-based milestones, with additional future revenue tied to royalty payments in selected territories.
MEI announced last Monday that the FDA had designated pracinostat as a “breakthrough therapy” when used in combination with the chemotherapy drug azacitidine to treat newly diagnosed patients with AML who are not eligible for intensive chemotherapy, or who are 75 and older.
About 20,830 new cases of AML are diagnosed in the United States each year, afflicting patients whose average age is 67, according to the American Cancer Society. It is unusual, though, for AML patients who are 70 and older to get high doses of chemotherapy drugs like cisplatin or methotrexate, or to risk a bone marrow transplant.
MEI said the FDA’s breakthrough therapy designation was backed by a Phase II study that showed a 42 percent complete response rate and median overall survival of 19.1 months in previously untreated elderly patients who received the drug.
By the end of last week, MEI shares had gained over 23 cents, or 16 percent, to close Friday at $1.61 a share.
Negotiations with Helsinn and other potential pharmaceutical partners had been underway for some time, Gold said late Friday. “When the news hit, we were able to knock it off, and finalize everything today.”
MEI and Helsinn also plan to work together to advance pracinostat as a treatment for other diseases, including myelodysplastic syndrome (MDS), a high-risk bone marrow disorder sometimes associated with AML and other blood cancers.
The deal for pracinostat represents a comeback of sorts for MEI Pharma and a redemption for CEO Daniel Gold, who joined MEI when the company moved to San Diego from Australia in 2010. The microcap company (MEI has about 20 employees and a market valuation Friday of just under $55 million) previously operated as Marshall Edwards, and was known chiefly in Australia for fumbling a late-stage study of the drug phenoxodiol for treating ovarian cancer.
Under Gold, MEI licensed pracinostat in 2013 from a Singaporean biotech company that was liquidating its assets. At that time, it was a late-stage oral compound with a validated anti-cancer target.
In a 2013 interview with Xconomy, Gold was forthright in explaining the challenges he faced at MEI, and voiced hope that MEI would eventually collaborate with a major pharmaceutical partner.
Helsinn is a privately held pharmaceutical group that specializes in cancer supportive care. The Swiss company may be best known for Aloxi, an anti-emetic often prescribed for patients getting the chemotherapy drug azacitidine (Vidaza).
In a statement today, Helsinn Group vice chairman and CEO Riccardo Braglia said the MEI agreement “broadens our focus beyond cancer supportive care products and into the development of oncology therapeutics.”Reprints | Share: